Legal Definitions - nonownership theory

Nonownership theory is a concept used in the oil and gas industry. It refers to a legal principle that states that the owner of a mineral interest does not have the right to possess the oil and gas in place, but only to search for, develop, and produce it. This means that the owner of the mineral interest has the right to use the land and remove items of value from it, but not to possess the oil and gas in place.

For example, let's say that John owns a piece of land that has oil and gas reserves underneath it. He sells the mineral rights to Jane, who now has the right to search for, develop, and produce the oil and gas. However, under the nonownership theory, Jane does not have the right to possess the oil and gas in place. She can only extract it and use it for her own purposes.

The nonownership theory is used in a few states, including California, Wyoming, Louisiana, and Oklahoma. It is different from the ownership-in-place theory, which holds that the owner of the mineral interest has the right to possess the oil and gas in place.